This paper studies whether, in the consumer credit market, peer-to-peer (P2P) lending platforms serve as substitutes for banks or instead as complements. I develop a conceptual framework and derive ...testable predictions to distinguish between these two possibilities. Using a regulatory change as an exogenous shock to bank credit supply, I find that P2P lending is a substitute for bank lending in terms of serving infra-marginal bank borrowers yet complements bank lending with respect to small loans. These results indicate that the credit expansion resulting from P2P lending likely occurs only among borrowers who already have access to bank credit.
Using a lender cutoff rule that generates plausibly exogenous variation in credit supply, I investigate a new channel through which funding shocks are transmitted to the real economy. Based on a ...sample of more than 15,000 loan applications from small- and medium-sized enterprises, I find that precautionary savings motives can aggravate real effects: low-liquidity firms whose loan applications were rejected increase cash holdings and cut noncash assets in excess of the requested loan amount. These results point to the amplifying effect of precautionary savings motives in the transmission of credit supply shocks.
We examine how a 16-week cut in potential unemployment insurance (UI) duration in Missouri affected search behavior of UI recipients and the aggregate labor market. Using a regression discontinuity ...design (RDD), we estimate marginal effects of maximum duration on UI and nonemployment spells of 0.45 and 0.25, respectively. We simulate the unemployment rate implied by the RDD estimates assuming no market-level externalities. The implied response closely approximates the decline in the unemployment rate following the benefit cut, suggesting that, even in a period of high unemployment, the labor market absorbed the influx of workers without crowding out other job seekers.
Cryptocurrencies are digital alternatives to traditional government‐issued paper monies. Given the current state of technology and skepticism regarding the future purchasing power of existing monies, ...why have cryptocurrencies failed to gain widespread acceptance? I offer an explanation based on network effects and switching costs. In order to articulate the problem that agents considering cryptocurrencies face, I employ a simple model developed by Dowd and Greenaway (1993) (Dowd, K., and D. Greenaway. “Currency Competition, Network Externalities, and Switching Costs: Towards an Alternative View of Optimum Currency Areas.” The Economic Journal, 103(420), 1993, 1180–89). The model demonstrates that agents may fail to adopt an alternative currency when network effects and switching costs are present, even if all agents agree that the prevailing currency is inferior. The limited success of bitcoin—almost certainly the most popular cryptocurrency to date—serves to illustrate. After briefly surveying episodes of successful monetary transition, I conclude that cryptocurrencies like bitcoin are unlikely to generate widespread acceptance in the absence of either significant monetary instability or government support. (JEL E40, E41, E42, E49)
Socioeconomic inequalities in college completion have widened over time. A critical question is how to support low-income and first-generation students to achieve college success. We investigate one ...effort, the Dell Scholars Program, which provides a combination of financial support and individualized advising to selected students who attend institutions throughout the United States. Using two quasi-experimental analytic strategies, regression discontinuity and difference-in-differences with a matched comparison sample, we find consistent evidence that being selected as a Dell Scholar leads to substantially higher rates of bachelor's degree completion within six years, as well improvements on multiple other measures of college success.
Recent research offers mixed results concerning the relationship between inflation expectations and consumption, using qualitative measures of readiness to spend. We revisit this question using ...survey panel data of actual spending from the United States between 2009 and 2012 that also allows us to control for household heterogeneity. We find that durables spending increases with expected inflation only for selected types of households while nondurables spending does not respond to expected inflation. Moreover, spending decreases with expected unemployment. These results imply a limited stimulating effect of inflation expectations on aggregate consumption, which could be reversed if inflation and unemployment expectations move together.
We show that extremely poor, war-affected women in northern Uganda have high returns to a package of $150 cash, five days of business skills training, and ongoing supervision. Sixteen months after ...grants, participants doubled their microenterprise ownership and incomes, mainly from petty trading. We also show these ultrapoor have too little social capital, but that group bonds, informal insurance, and cooperative activities could be induced and had positive returns. When the control group received cash and training 20 months later, we varied supervision, which represented half of the program costs. A year later, supervision increased business survival but not consumption.
A FIELD EXPERIMENT IN MOTIVATING EMPLOYEE IDEAS Gibbs, Michael; Neckermann, Susanne; Siemroth, Christoph
The review of economics and statistics,
10/2017, Volume:
99, Issue:
4
Journal Article
Peer reviewed
Open access
We study a field experiment at a large technology company. Employees were encouraged to submit ideas on process and product improvements. The company randomly assigned nineteen teams into treatment ...and control groups. Treatment team employees received rewards if their ideas were approved. Nothing changed for control team employees. Our main finding is that rewards substantially increased the quality of ideas. Rewards increased participation in the suggestion system but decreased ideas per participating employee, with no net effect on the quantity of ideas. Broader participation persisted after the reward was discontinued, suggesting habituation. We find no evidence for motivational crowding out.
This paper explores the gender-differentiated effects of weather shocks on households' welfare in Malawi using panel data aligned with climatic records. Results show that temperature shocks severely ...affect household welfare, reducing consumption, food consumption and daily caloric intake. The negative welfare effects are more severe for households where land is solely managed by women, a finding that sheds light on the gender-unequal impact of temperature shocks. Our evidence also suggests that women's vulnerability to temperature shocks is linked to women's land tenure security, as temperature shocks significantly impact women's welfare only in patrilineal districts, where statistics show that investment in agricultural technologies is lower.
Monopsony Power in Migrant Labor Markets Naidu, Suresh; Nyarko, Yaw; Wang, Shing-Yi
The Journal of political economy,
12/2016, Volume:
124, Issue:
6
Journal Article
Peer reviewed
By exploiting a reform in the United Arab Emirates that relaxed restrictions on employer transitions, we provide new estimates of the monopsony power of firms over migrant workers. Our results show ...that the reform increased incumbent migrants’ earnings and firm retention. This occurs despite an increase in employer transitions and is driven by a fall in country exits. While the outcomes of incumbents improved, the reform decreased demand for new migrants and lowered their earnings. These results are consistent with a model of monopsony in which firms face upward-sloping labor supply curves for both new recruits in source countries and incumbent migrants.
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